The company also must give billing credits to former customers, which has been valued at over $1 million.

At one time Gov. Tim Pawlenty was one of three directors and an investor in New Access' parent company, NewTel Holdings. Pawlenty has said he had no oversight over New Access and didn't know about complaints against the company.

Reports of Pawlenty's ties to New Access last year ignited political battles at the Capitol, especially after Pawlenty disclosed he was paid about $60,000 in attorney's fees while a legislator by his longtime friend and political confidant Elam Baer, the chairman of NewTel.

Regulators in other states also heard from consumers and Minnesota Attorney General Mike Hatch, a Democrat, led the multistate investigation into the company.

The nine other states involved in the investigation were: Colorado, Iowa, Michigan, Montana, Nebraska, North Dakota, Ohio, Texas and Wisconsin.

The states initiated the investigation after receiving complaints of so-called "slamming," in which the company had failed to disclose that "package prices" didn't include in-state long distance calls or other features and that New Access pretended to be calling from another phone company.

The settlement also includes a provision that New Access must tape record its telemarketing calls.

New Access said the settlement "should not be construed or used as admission of any fault, wrongdoing or liability for any purpose, and New Access specifically denies all allegations made by the state attorneys general.

"All parties entered into the settlement agreement to avoid the delay, uncertainty, inconvenience and expense of protracted litigation," the statement said.

New Access noted that it had already adopted many of the marketing controls called for by the settlement.

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